I listen to Air America occasionally on my XM radio and it's 100% bitch and bile. Never a constructive thought, it's non-stop griping about the terrible, super-awful world that George Bush and his Christ-Army are forcing on America.

Even if you agree with that philosophy, how long can people stay ginned up with anger? (C'mon and do it, do it, do it til you're satisfied)

Good analysis, Ace, and right on. The reason AlGore wanted to create the 'lockbox' was so that us taxpayers couldn't see what was really inside of it: nothing. But this is just another example of the deNOcrats having no ideas of their own so they will just obstruct those who want to do something constructive.

Now I don't claim to be a genius, but isn't the whole "trust fund" smoke and mirrors?

The way I understand it, there is no trust fund. The dollar you put in today goes out tomorrow to someone who is drawing benefits. It does NOT sit around collecting interest.

Thus, unless I am entirely mistaken, the entire lefty "trust fund" argument is a lie.

Correct?

I knew Garofalo was lying when she claimed that the bush administration was suggesting that we should partially privatizing social security by investing in "Elvis: Aloha from Hawaii" commemorative plates.
And is it just me or does "Garofalo" sound like some unholy cross between a giraffe and a buffalo?

THE FAT KID BLOG

The above commenter is right. There is no trust fund. Ace is correct when he says there are only IOU's there, but there are no assets, there are no T-Bills, there are no bonds, there is nothing. Period. And since outflow will exceed income in 2018, that is when the program is bankrupt. Not 2042. 2042 is only how long the program could last IF there was some kind of asset in the misleadingly named 'trust fund.' But there ain't anything there.

2042 is when outflows will exceed inflows by a large enough margin so that by law benefits will be cut by 28%. That is the Bush Administrations rationale for calling it bankrupt...(ie paying people back only 70 cents on the dollar that they earned like what happens in a bankruptcy).

Show of hands,
Will President Bush get the S.S. reform passed?
I say yes.

Yes to some sort of reform.
No to priva...er personalized accounts.

Actually the Social Security program runs a surplus right now, and the extra funds are 'invested' in Treasury securities. (In other words, the 'surplus' gets raided by Congress to spend on pork.) That much is true. What will happen in 2018 is that Social Security program will start asking for its money back from the Federal government, redeeming the bonds to make up for the shortfall of cash coming in from current workers. And, that's when the real hard choices will come, because the Federal government will need to get that money from somewhere.

Of course, the interest that is being 'earned' and the principal are all paid by the same source, that is, the American taxpayer. It ends up being a huge wealth transfer from workers/taxpayers to Social Security recipients.

At the end of the day, it's like writing yourself an IOU and pretending you have assets. That's one more reason why private accounts are such a good idea - investing in the capital markets, you can earn real returns, and properly diversified you run very little risk of losing your savings. This, in addition to the principle arguments about an ownership society and so on. It just makes sense, unless you're a Democrat.

That's 'principal'... I hate it when I do that...

The problem with raising taxes now to pay for s.s. shortfalls down the road is Congress will just spend any theoretical extra revenues incurred from the tax increase. Much better to "starve the beast" by running deficits. Remember, the prescription drug monstrosity was borne out of the so-called "surplus" days on the late '90's.

I think it will pass too. Unless republicans completly lose their spine. But what are the odds of that right?

FAT KID BLOG

I think the whole premise of calling people liars who disagree is, in many cases, dishonest itself. Not to mention cheap, thoughtless, and shallow. It may be over the top to call it a "crisis" but it's not like the left never uses the term.

Say Bush is lying about the social security "crisis". Why? To what end? Because he's evil and wants us all to die shortly after we retire?

I think there are problems with social security. I have a hard time believing that anyone can see otherwise. But I don't necessarily think they're all liars. I think they're just wrong.

Treasury bills are debt-instruments issued by the United States Government. ... But how can the government pay off this debt?

Excellent post, Ace. It is actually simpler than all that -- whenever the government pays anything to anyone, the answer to the question, "Where does it come from?" is ALWAYS the same: taxes.

The credit of the US government is based on only one thing: it's ability to seize real assets from productive people via taxation.

That's what all forms of government borrowing is -- deferred taxation. This is true because any debt that the government incurs can only be re-paid via taxation. The gov't earns nothing of value. It will not raise the revenue from the profits gleaned from the cafeterias in the basements of federal buildings.

Of course, the really confidence-shattering Unspoken Truth is that, like all federal monetary matters, it's all an illusion: the dollar bills in your pocket are debt-instruments, too. Based on .... taxation, of course.

They do not need your income tax, or your payroll taxes. They have all of the printing presses. They can print whatever they want. What would you do if you could take a tree worth a couple of thousand dollars at most, mulch it into paper and call it a billion dollars?

Watch what Bush is doing - he's going on a tour of red states with blue senators to begin the process of bludgeoning enough Dems either by fear or actual persuasion to come on board of the process. Once you get enough Dems past the head-in-sand BS, the rest is easier.

I also recall reading that the issue of personal accounts polls very well in particular with significant segments of even the Democratic base, so Bush knows he's got a winner if he plays his hand well.

Why can't they just appoint a comitee to trim the pork from all those bills. There might be some money there we could free up for the American people. Maybe cut wages for politicians, I mean do they really need to make that much money? And if they feel they really need that kind of money, then have them justify it by requiring their financial reports summed up by a noninterested source and posted in their campaign information the next time they run.

George G.
Thats right, and the cost to print the money is just three cents, no matter what the denomination of the bill.

There is a third way to pay off the Treasuries (Ace listed two: raise taxes or issue new debt). However, I don't think that there would be any appetite in Washington for the third option either: cut spending.

The truly scary thing was reading the SS threads on DU this morning and seeing some DU'ers actually explaining to the rest of the moonbats why making Bill Gates and Ken Lay pay SS taxes on all of their taxable wages above $90k wouldn't work.

The President needs to bring Ross Perot on board with his charts and graphs if he wants SS fixed. The whole subject is entirely too wonkish. At some point the President should request time from the networks and go directly to the "folks" with a good powerpoint presentation.

Private accounts and SS solvency are not related, so closing the sale on private accounts depends somewhat on the means by which SS is made solvent.

The whole argument from the Dems that the crisis is a long way off is a non-starter.
Do they want us all to wait until its a screaming emergency?

How about taking care of it now, while we still have time to do some long term planning?

What are we paying these assholes to do?

Here's a link that'll make y'all plotz.

How many of you out there are self employed? If you are, or you do payroll, you know how much money vanishes out of your check before you see it. It's 6.2% for SS and 1.8% for Medicare, and whatever your state steals from you - in California, this year, it's 1.08% for 'Social Disability Insurance', which includes you paying not just for people who've been injured or whatever, but so someone can stay home with their kid.

This is why personal accounts are a winner. As long as you have to have this forced savings, you should be able to invest it and see return, rather than it vanishing into an IOU, which is all that will be left for you if you're under thirty.

Social Security is a tendentious statement.

I know better what to do with my money than the government does. End of argument. The notion that SS will go bankrupt is obvious. It never was all that solid a system.

Right on Dianna.

Disability/Unemployment "insurance" is such a scam. My friend's co-worker fell down some stairs at work and hurt her leg. Now, after she was treated and her doctor okay'ed her to return to work (which consists of sitting in an Aeron all day) she claims she can't work. The company offered to set her up to work from home and offered all sorts of concessions. She still won't go back to work, and it's been almost a year. The worst part is that by law, she can't be replaced. They have to keep her position open. This means that other workers and random temps have to pick up the slack.

Another person I know is a PA for crappy TV shows. In between seasons, she collects unemployment, but I don't see how a scheduled hiatus qualifies as being "unemployed."

Oh, and paid maternity leave (not to mention public education) is totally unfair to anyone who can't have or doesn't want children.

"Private accounts and SS solvency are not related"

rw,

if you opt for private accounts your benefits will be less from SS, no?

Private accounts are good for a couple reasons. I would like to have more control over the money that is sucked out of my paycheck. Also, having that kind of cash pumped into the markets is always a good thing. Increases capital expenditure by corporations, which leads to new jobs, which leads to more revenue, etc, etc, etc.

Bear in mind that in Bill Clinton's 1999 SOTU he vowed to 'save Social Security' as his number one priority. He used, near as I can figure, nearly identical numbers as Dubya did. The Donks applauded.
Rush played the clips on his show today. This is why Dubya will get his reform pushed through, he's got the Donks themselves saying the exact things he is saying. The Donks are losing everywhere because they don't understand the power of Google. It now takes only minutes to find quotes from them saying the exact things that they now call lies.Kerry might have won in November if he'd only remembered warning America about Saddam's dangerous WMD in 1998.
It won't take long before we have quotes from Pelosi and Reid echoing Clinton's 1999 talk of a Social Security Crisis. They're out there, Limbaugh, Hannity and a whole crowd of other talk radio types are scouring the clippings for them now. With the help of talk radio and conservative bloggers Dubya is going to ram those quotes right up the Donks lying asses.

The wierdest of the dem talking points about SS is that social security won't be "bankrupt" in 20-whatever, and the GWB is lieing when he says it will be. Josh Marshall has been pushing this for a week or two, and Pelosi mentioned it in the rebuttal.

You see according to Marshall, the system won't be "bankrupt" because, even at its worst, it will still have enough income to pay 70-80% of its obligations.

I'd like to see US Air and Trump Industries use that excuse. "We're not bankrupt! We still have enough income to pay 80% of our debts! That's not bankruptcy at all! Just ask Josh Marshall!"

One of the biggest potential problems with putting off a change with SS is it will involve a generational battle which senior citizens(circa 2030) will lose.Given the opportunity to raise payrll taxes to keep the system solvent or cut benefits the working citizens will certainly cut benefits.SinceI hope to be retired by 2030;I'd rather they don't get cut.And I know 2030 seems a long way off(25 years),but I recall seeing " Back to the Future "at a movie and I think it was 1985.So tempus fugits.

I am self employed, Dianna. Do you enjoy raising my blood pressure?
Not to mention the state 'Unemployment Insurance,' which I pay twice, as employee and employer(for myself, I have no employees), and from which I can NEVER EVER COLLECT.

#1 LauraW you have my sympathy, at least in Canada as a self employed person I don't have to contribute to Unemployment Insurance because I cannot collect on it. One point for Canada, LOL. We won't mention the much higher taxes overall.

#2 What is a rip off I've just discovered is that the Canada Pension Plan, which has similar problems to the US plan, is that if you die, your estate doesn't get your benefits, if you are receiving your benefits, they give your estate $2500 dollars on your death, otherwise you get nothing for your contribution. As my accountant said, calling it a pension plan is a misnomer.

Now imagine if you had taken that same money and had invested it wisely over the same 40 year or so period, do you know how much money the average person would have now? I believe that might be GW's point.

#3 Would someone send the whole DNC out for a psychiatric examination, their suicidal tendencies show no sign of lapsing - don't they realize as even the biased MSM examines this issue more closely and as the administration explains this all in plainer language as Ace has, the American people are going to see who the real liars are? Is there no one in the DNC with any economic or sociological expertise, any brains? have they not caught on that we have a demographic shift of immense implications on the horizon? Oh wait a minute, maybe Joe Lieberman is the one exception to the rule.

They do seem to get that health care is part of that equation but SS is just as important. Even if the system isn't bankrupt by 2018, all Western countries are facing decling birth rates, therefore declining labour forces who support the social welfare programs(unless you increase immigration, legal that is) and burgeoning populations of seniors, coupled with medical advancements that keep people living longer and longer. The better question is why has it taken so long to get the SS reform ball rolling?

The Democrats seem resigned to minority status and actually it is too bad for the American people because a real credible and intelligent opposition party is actually a good thing.

the only concern is that the Republicans do the reform right or as right as possible, and like Ace, I don't know enough about how SS works to know if ALL the ideas or reform suggestions are good ones...

and you can't really trust most Democrats to be the voice of reason on that score

Good job, Ace! I like to call Air America, "Error America." The sad thing is, Al Franken is a funny guy when he's not moaning and groaning.

The media and liberal spin is to portray the current Social Security as "Everything is just fine." But the Democrats in office know that there's a crisis coming. The difference between them and the GOP, is that the Democrats have the entitlement "just raise taxes on the rich" mindset. That's how Social Security tax rates have grown from 2% to over 12%. When will they stop? 15%? 25%? 35%? When taxes reach 100%?

The GOP wants to put money at work in the economic growth engine. It sure beats what we have now.

"...having that kind of cash pumped into the markets is always a good thing."

And that is the real reason a lot of lefties oppose it.

It would strengthen the beast they want to starve, the juggernaut American economy and the large corporations in it.

I *had* a lefty friend, this seemed to be the point that drove him the most crazy; the fact that 'Government' money would flow to corporations.

These people never seem to understand that there is no such thing as Government money.

I don't specialize in gov't accouting, but I am a CPA.

Here's what they did: Instead of borrowing money from the public at interest, they "borrowed" the Social Security surplus. This was begun during the Vietnam War by LBJ to hide the cost.

It's like having two budgets, one in a surplus the other in deficit. You use one to pay the other.

The deficit reported by the gov't is the NET of these two. So it's actually been far larger than reported for quite some time.

The upshot is, there are no assets per se. There's just less debt.

Hey TallDave, can you do my taxes?

I believe the Congress should either make SS exactly like their retirement pension plan or eliminate Congressional Retirement schemes and replace them with SS. SS would then get privatized/personalized overnight.
Also, there seems to be some ranting about the personal/private accounts being invested in the stock market, and I don't believe anyone is forced to do that- the comparison W made was to the Fed Employee Thrift system and in that system one can pick 100% US Treasuries if they want or 50% / 50% corp bonds/ US Treasuries.

Get all your Social Security Choice info here.

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